Munich Re, the world's largest reinsurance firm by revenues, is buying 0.2% in Apollo Energy for Rs 73.67 crore, reports The Economic Times, citing sources close to the development. The deal will value the energy venture  at a phenomenal $7.5 billion (Rs 36,835 crore which is more than 15 times the market cap of Apollo Hospitals).

A privately-held holding company of Prathap Reddy-led Apollo Hospitals Group, Apollo Energy has investments in power generation sector besides being the holding entity for the group's health insurance JV with Munich Re's subsidiary.

It owns 74.5% in the health insurance JV Apollo DKV Insurance Company while Munich Re holds 25.5% through a wholly owned health insurance subsidiary DKV International Health Holding. The two partners had initially committed Rs 108 crore in the JV which was formed in August 2007.

The latest transaction also indirectly ups Munich Re's holding in the insurance JV by 0.149% taking the total stake to 25.65%. This would still be within the Indian foreign direct investment(FDI) norms which prescribe a ceiling of 26% FDI in the insurance sector.

Established in 1997 to get into power projects, Apollo Energy was also to spearhead Apollo Hospitals Group's diversification into the power sector. However not much is not known about the existing businesses and projects of the company which indicates that the high valuation of the firm from Munich Re is to account for the insurance venture.

Apollo DKV offers insurance products for in-patient hospitalisation, personal accident cover, critical illness cover, overseas travel and health cover.

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